British Leyland: a modest proposal
Tim Congdon
In the days when British Leyland made a profit, there was a readily understandable reason why its workers went on strike. They were trying to get more money for themselves and leave less for the shareholders. Today, however, there are no profits and very few shareholders. So why do they keep on striking? Whom are they trying to fleece?
The answer is the Government or, in other words, the taxpayer. The struggle is no longer a simple confrontation between labour and capital of the kind celebrated in Das Kapital and the Jarrow marches. Instead, it is a confidence trick, in which union leaders pretend that British Leyland is a 'great national asset' — or rather could become one after unspecified subsidies and an indefinite length of time. Their hope is that ministers will recoil at the thought of headlines screaming about thousands of redundancies. So yet more public money will be committed to shoring up this part of 'Britain's manufacturing base'.
British Leyland is clearly not a great national asset. Of the £1,000 million allocated to it by the Labour government, £775 million has already been spent. There are suppositions that .a further £500 million may be needed soon, over and above the £225 million left. The company is in truth a gross national liability. A cost-benefit analyst, coming to it for the first time without any dogmatic preconceptions, would probably conclude that the social value of its plant, machinery and buildings is negative. Despite this, and the workers' manifest dependence on public goodwill and political cowardice, the unions continue to adopt an attitude of 'them' and 'us', as if they were in the darkest days of the industrial revolution.
Since the company is worth nothing or less than nothing, there is an easy way to call the unions' bluff. It is to give the entire operation to the workers and let them manage it themselves. If they went on strike then, they would not be striking against management, shareholders, Conservative ministers, the Government or the taxpayer, but against themselves. The practicalities of converting British Leyland into a workers' co-op would not be particularly compli cated. The Government could buy out the small number of shares still in private hands and have the National Enterprise Board's holdings transferred to it at a nominal price. The shares would be distributed either on the principle of one share for each employee or on some formula which took account of length of service and possibly seniority. As shareholders, the workers would be entitled to elect a board of directors at an extraordinary general meeting and the directors would appoint the management. The workers' income would have two parts — their wages, as at present, and the dividend on the shares. There might need to be some initial restriction on the marketability of the shares, so that they remained in the hands of Leyland workers for, say, three years. This would encourage responsible behaviour until the 'them' — `us' mentality had changed. But there would be no objection to British Leyland eventually becoming a quoted company once more. If they had been able to turn the company round, the workers could sell the shares, which they received gratis, to pension funds and insurance companies at a tidy profit. This proposal might be regarded as a joke. Indeed, perhaps the only justification for recent government intervention in industry is that it has given entertainment to the majority of the population who have not been directly affected by it. There is, after all, a certain irony in withdrawing labour to protest against being put out of a job, as the workers at British Shipbuilders have recently done and those at British Leyland are threatening to do. Such antics are only possible because government money is available. But the comedy has been badly scripted and, despite some stolid performances from Mr Terry Duffy and Mr Moss Evans, indifferently acted. It is losing a great deal of money and should be stopped.
The proposal is, in fact, intended quite seriously. The Leyland workers would be given a 100 per cent shareholding only on condition that all state aid ceased. If the Leyland workers refused to accept this deal, they would reveal their motives in the present dispute as an attempt to blackmail the Government into more and larger handouts. If they believe in all sincerity that Leyland has a future, they could not turn the deal down. One hundred per cent ownership entails 100 per cent responsibility. They might grumble about their inability to borrow from the banks or the financial markets if they were a workers' co-op because they would be deemed too bad a risk. But they would have only themselves to blame. If bank managers turned them down, it would at least make them realise that every pound now being 'invested' in Leyland is one pound less being invested elsewhere. One proviso should be inserted. The Government might allow some further aid to Leyland after the establishment of a workers' co-op. But it should insist that the money be paid by the Department of Health and Social Security. No support should come, via the National Enterprise Board, from the Department of Industry, since what is happening at British Leyland at present has nothing to do with either enterprise or industry. The purity of the language would be preserved, as well as departmental functions tidied up, if this little administrative reform were put into effect. No one could criticise the idea of giving British Leyland to the workers on the grounds that it is unfashionable. In his well-known 1976 Wincott Lecture on Employment, Inflation and Politics, Mr Peter Jay recommended that Britain forsake the traditional company form, in which shareholders' interests are in apparent conflict with the workers', in favour of industrial democracy. Only in this way, he thought, would the labour force be brought to an understamling of market pressures. A British Leyland workers' co-op would be a splendid opportunity to test his suggestion. The Government should also be enthusiastic. British Leyland would once again become a privately-owned company and the size of the state sector would be reduced. Perhaps more importantly, the rational economy, which includes companies like ICJ, Racal and Ford, and industries like the City and tourism, would expand at the expense of what Sir Geoffrey, Howe has termed the 'dream world' economy, which consists of virtually all of the nationalised industries, British Shipbuilders and, most conspicuously, British Leyland. The 'dream world' economy may be defined as one in which market forces have been suspended and political argument is being ignored; it is characterised by such phenomena as workers expecting to he paid more for less work and a belief that the best method of obtaining state aid is total bloody-mindedness.
Finally, socialists should see in the transformation of British Leyland the fulfilment of their most idealistic visions. The proletariat would flave absolute command over the means of production in the motor industry and could expect to receive all the rewards of its labour.
The conversion of British Leyland into a workers' co-op would please thinkers, dreamers and‘practical men of al ldenomi nabons. Unfortunately, it is unlikely to happen. Leyland shop stewards may be able to con the Government, but they cannot con themselves. They know perfectly well that the sum total of the NEB 'capital injections', redundancy paymenls, strike pay, social security benefits and other miscellaneous goodies their members should receive in the next two or three years is much greater than the sum total they could get from trying to make Leyland a commercially viable and successful enterprise, whether owned by themselves or someone else. To decide if that is their fault, or the consequence of government industrial and social policies for the last 20 years, is, however, a wider and more subtle question.
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